We sponsor various defined benefit pension plans (qualified and non-qualified) which, in the aggregate, cover a substantial portion of our employees including legacy CenturyLink, legacy Level 3, legacy Qwest Communications International Inc. ("Qwest") and legacy Embarq employees. Pension benefits for participants of the Lumen Combined Pension Plan ("Combined Pension Plan") who are represented by a collective bargaining agreement are based on negotiated schedules. All other participants' pension benefits are based on each individual participant's years of service and compensation. We also maintain non-qualified pension plans for certain current and former highly compensated employees. We maintain post-retirement benefit plans that provide health care and life insurance benefits for certain eligible retirees. We also provide other post-employment benefits for certain eligible former employees. We use a December 31 measurement date for all our plans.

United States funding laws require a company with a pension shortfall to fund the annual cost of benefits earned in addition to a seven-year amortization of the shortfall. Our funding policy for our Combined Pension Plan is to make contributions with the objective of accumulating ample assets to pay all qualified pension benefits when due under the terms of the plan. The accounting unfunded status of the Combined Pension Plan was $1.7 billion as of December 31, 2020 and 2019.

We made no voluntary cash contributions to the Combined Pension Plan in 2020 and 2019 and paid $5 million of benefits directly to participants of our non-qualified pension plans in both 2020 and 2019. Based on current laws and circumstances, we do not believe we are required to make any contributions to the Combined Pension Plan in 2021, but the Company could make voluntary contributions to the trust for the Combined Pension Plan in 2021. We estimate that in 2021 we will pay $5 million of benefits directly to participants of our non-qualified pension plans.

We recognize in our balance sheet the funded status of the legacy Level 3 defined benefit post-retirement plans. The net unfunded status of these plans was $33 million and $18 million, as of December 31, 2020 and 2019, respectively. Additionally, as previously mentioned, we sponsor unfunded non-qualified pension plans for certain current and former highly-compensated employees. The net unfunded status of our non-qualified pension plans was $51 million for both the years ended December 31, 2020 and 2019. Due to the insignificant impact of these pension plans on our consolidated financial statements, we have predominantly excluded them from the remaining employee benefit disclosures in this Note, unless specifically stated.

Our post-retirement benefit plans provide post-retirement benefits to qualified retirees and allow (i) eligible employees retiring before certain dates to receive benefits at no or reduced cost and (ii) eligible employees retiring after certain dates to receive benefits on a shared cost basis. The post-retirement benefits not paid by the trusts are funded by us and we expect to continue funding these post-retirement obligations as benefits are paid. The accounting unfunded status of our qualified post-retirement benefit plan was $3.0 billion as of December 31, 2020 and 2019.

Assets in the post-retirement trusts were substantially depleted as of December 31, 2016; as of December 31, 2019 the Company ceased to pay certain post-retirement benefits through the trusts. No contributions were made to the post-retirement trusts in 2020 nor 2019. Starting in 2020, benefits were paid directly by us with available cash. In 2020, we paid $211 million of post-retirement benefits, net of participant contributions and direct subsidies. In 2021, we currently expect to pay directly $233 million of post-retirement benefits, net of participant contributions and direct subsidies.

We expect our expected health care cost trend to range from 5.0% to 6.25% in 2021 and grading to 4.50% by 2025. Our post-retirement benefit cost, for certain eligible legacy Qwest retirees and certain eligible legacy CenturyLink retirees, is capped at a set dollar amount. Therefore, those health care benefit obligations are not subject to increasing health care trends after the effective date of the caps.

The Combined Pension Plan payments, post-retirement health care benefit payments and premiums, and life insurance premium payments are either distributed from plan assets or paid by us. The estimated benefit payments provided below are based on actuarial assumptions using the demographics of the employee and retiree populations and have been reduced by estimated participant contributions.


	Combined Pension Plan		Post-Retirement Benefit Plans	Medicare Part D Subsidy Receipts
	(Dollars in millions)
Estimated future benefit payments:
2021	$	961	238	(5)
2022	868		232	(5)
2023	844		225	(5)
2024	819		217	(4)
2025	794		210	(4)
2026 - 2030	3,578		932	(16)

We utilize a full yield curve approach in connection with estimating the service and interest components of net periodic benefit expense by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flow.


	Combined Pension Plan						Post-Retirement Benefit Plans
	2020		2019		2018		2020		2019		2018
Actuarial assumptions at beginning of year:
Discount rate	2.79% - 3.55%		3.94% - 4.44%		3.14% - 3.69%		1.69% - 3.35%		3.84% - 4.38%		4.26	%
Rate of compensation increase	3.25	%	3.25	%	3.25	%	N/A		N/A		N/A
Expected long-term rate of return on plan assets (1)	6.00	%	6.50	%	6.50	%	4.00	%	4.00	%	4.00	%
Initial health care cost trend rate	N/A		N/A		N/A		6.50% / 5.00%		6.50% / 5.00%		7.00% / 5.00%
Ultimate health care cost trend rate	N/A		N/A		N/A		4.50	%	4.50	%	4.50	%
Year ultimate trend rate is reached	N/A		N/A		N/A		2025		2025		2025


	Combined Pension Plan Years Ended December 31,
	2020		2019	2018
	(Dollars in millions)
Service cost	$	59	56	66
Interest cost	324		436	392
Expected return on plan assets	(593)		(618)	(685)
Special termination benefits charge	13		6	15
Recognition of prior service credit	(9)		(8)	(8)
Recognition of actuarial loss	202		223	178
Net periodic pension benefit (income) expense	$	(4)	95	(42)


	Post-Retirement Plans Years Ended December 31,
	2020		2019	2018
	(Dollars in millions)
Service cost	$	14	15	18
Interest cost	69		110	97
Expected return on plan assets	(1)		(1)	(1)
Recognition of prior service cost	16		16	20
Curtailment loss	8		—	—
Net periodic post-retirement benefit expense	$	106	140	134

We report service costs for our Combined Pension Plan and post-retirement benefit plans in cost of services and products and selling, general and administrative expenses in our consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018. Additionally, a portion of the service cost is also allocated to certain assets under construction, which are capitalized and reflected as part of property, plant and equipment in our consolidated balance sheets. The remaining components of net periodic benefit expense are reported in other income, net in our consolidated statements of operations. As a result of ongoing efforts to reduce our workforce, we recognized a one-time charge in 2020 of $21 million, in 2019 of $6 million and in 2018 of $15 million for special termination benefit enhancements paid to certain eligible employees upon voluntary retirement.


	Combined Pension Plan				Post-Retirement Benefit Plans
	December 31,				December 31,
	2020		2019		2020		2019
Actuarial assumptions at end of year:
Discount rate	2.43	%	3.25	%	2.40	%	3.22	%
Rate of compensation increase	3.25	%	3.25	%	N/A		N/A
Initial health care cost trend rate	N/A		N/A		6.25% / 5.00%		6.50% / 5.00%
Ultimate health care cost trend rate	N/A		N/A		4.50	%	4.50	%
Year ultimate trend rate is reached	N/A		N/A		2025		2025

In 2020, 2019 and 2018, we adopted the revised mortality tables and projection scales released by the Society of Actuaries, which decreased the projected benefit obligation of our benefit plans by $3 million, $4 million and $38 million, respectively. The change in the projected benefit obligation of our benefit plans was recognized as part of the net actuarial loss and is included in accumulated other comprehensive loss, a portion of which is subject to amortization over the remaining estimated life of plan participants, which was approximately 9 years as of December 31, 2020.


	Combined Pension Plan Years Ended December 31,
	2020		2019	2018
	(Dollars in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	12,217	11,594	13,064
Service cost	59		56	66
Interest cost	324		436	392
Plan amendments	(3)		(9)	—
Special termination benefits charge	13		6	15
Actuarial loss (gain)	749		1,249	(765)
Benefits paid from plan assets	(1,157)		(1,115)	(1,178)
Benefit obligation at end of year	$	12,202	12,217	11,594


	Post-Retirement Benefit Plans Years Ended December 31,
	2020		2019	2018
	(Dollars in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	3,037	2,977	3,375
Service cost	14		15	18
Interest cost	69		110	97
Participant contributions	46		52	54
Direct subsidy receipts	6		7	8
Plan Amendment	—		—	(36)
Actuarial loss (gain)	134		180	(224)
Curtailment loss	4		—	—
Benefits paid by company	(255)		(300)	(311)
Benefits paid from plan assets	(7)		(4)	(4)
Benefit obligation at end of year	$	3,048	3,037	2,977

We maintain plan assets for our Combined Pension Plan and certain post-retirement benefit plans. As previously noted, assets in the post-retirement benefit plan trusts were substantially depleted as of December 31, 2016. Fair value of post-retirement benefit plan assets of December 31, 2020, 2019 and 2018 was $5 million, $13 million and $18 million, respectively. Due to the insignificance of these assets on our consolidated financial statements, we have predominantly excluded them from the disclosures of plan assets in this Note, unless otherwise indicated.


	Combined Pension Plan Years Ended December 31,
	2020		2019	2018
	(Dollars in millions)
Change in plan assets
Fair value of plan assets at beginning of year	$	10,493	10,033	11,060
Return on plan assets	1,210		1,575	(349)
Employer contributions	—		—	500
Benefits paid from plan assets	(1,157)		(1,115)	(1,178)
Fair value of plan assets at end of year	$	10,546	10,493	10,033

The expected rate of return on plan assets is the long-term rate of return we expect to earn on the plan's assets, net of administrative expenses paid from plan assets. It is determined annually based on the strategic asset allocation and the long-term risk and return forecast for each asset class.

Our investment objective for the Combined Pension Plan assets is to achieve an attractive risk-adjusted return over time that will provide for the payment of benefits and minimize the risk of large losses. We employ a liability-aware investment strategy designed to reduce the volatility of pension assets relative to pension liabilities. This strategy is evaluated frequently and is expected to evolve over time with changes in the funded status and other factors. Approximately 55% of plan assets is targeted to long-duration investment grade bonds and interest rate sensitive derivatives and 45% is targeted to diversified equity, fixed income and private market investments that are expected to outperform the liability with moderate funded status risk. At the beginning of 2021, our expected annual long-term rate of return on pension assets before consideration of administrative expenses is assumed to be 6.0%. Administrative expenses, including projected PBGC (Pension Benefit Guaranty Corporation) premiums reduce the annual long-term expected return net of administrative expenses to 5.5%.

Fair Value Measurements: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB. For additional information on the fair value hierarchy, see Note 13—Fair Value of Financial Instruments.

The plan's assets are invested in various asset categories utilizing multiple strategies and investment managers. Interests in commingled funds are fair valued using a practical expedient to the net asset value ("NAV") per unit (or its equivalent) of each fund. The NAV reported by the fund manager is based on the market value of the underlying investments owned by each fund, minus its liabilities, divided by the number of shares outstanding. Commingled funds can be redeemed at NAV, with a frequency that includes, daily, monthly, quarterly, semi-annually and annually. These commingled funds include redemption notice periods between same day and 270 days. Investments in private funds, primarily limited partnerships, represent long-term commitments with a fixed maturity date and are also valued at NAV. The plan has unfunded commitments related to certain private fund investments, which in aggregate are not material to the plan. Valuation inputs for these private fund interests are generally based on assumptions and other information not observable in the market. Underlying investments held in funds are aggregated and are classified based on the fund mandate. Investments held in separate accounts are individually classified.

The table below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2020. It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivables, pending trades and accrued expenses.


	Fair Value of Combined Pension Plan Assets at December 31, 2020
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Assets
Investment grade bonds (a)	$	726	4,066	—	4,792
High yield bonds (b)	—		262	6	268
Emerging market bonds (c)	218		172	—	390
U.S. stocks (d)	653		—	2	655
Non-U.S. stocks (e)	593		1	—	594
Private debt (h)	—		—	—	—
Multi-asset strategies (l)	199		—	—	199
Repurchase agreements (n)	—		—	—	—
Cash equivalents and short-term investments (o)	—		281	—	281
Total investments, excluding investments valued at NAV	$	2,389	4,782	8	7,179
Liabilities
Derivatives (m)	$	—	(1)	—	(1)
Investments valued at NAV					3,368
Total pension plan assets					$	10,546

The table below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2019. It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivable, pending trades and accrued expenses.


	Fair Value of Combined Pension Plan Assets at December 31, 2019
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Assets
Investment grade bonds (a)	$	828	3,197	—	4,025
High yield bonds (b)	—		232	5	237
Emerging market bonds (c)	203		84	—	287
U.S. stocks (d)	756		3	1	760
Non-U.S. stocks (e)	592		—	—	592
Private debt (h)	—		—	16	16
Multi-asset strategies (l)	257		—	—	257
Repurchase agreements (n)	—		39	—	39
Cash equivalents and short-term investments (o)	—		433	—	433
Total investments, excluding investments valued at NAV	$	2,636	3,988	22	6,646
Liabilities
Derivatives (m)	$	1	(18)	—	(17)
Investments valued at NAV					3,864
Total pension plan assets					$	10,493


	Fair Value of Plan Assets Valued at NAV
	Combined Pension Plan at December 31,
	2020		2019
	(Dollars in millions)
Investment grade bonds (a)	$	352	211
High yield bonds (b)	25		39
U.S. stocks (d)	192		169
Non-U.S. stocks (e)	308		467
Emerging market stocks (f)	81		92
Private equity (g)	283		322
Private debt (h)	505		483
Market neutral hedge funds (i)	222		433
Directional hedge funds (j)	254		443
Real estate (k)	543		635
Multi-asset strategies (l)	375		449
Cash equivalents and short-term investments (o)	228		121
Total investments valued at NAV	$	3,368	3,864

(a) Investment grade bonds represent investments in fixed income securities as well as commingled bond funds comprised of U.S. Treasury securities, agencies, corporate bonds, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities. Treasury securities are valued at the bid price reported in the active market in which the security is traded and are classified as Level 1. The valuation inputs of other investment grade bonds primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. The primary observable inputs include references to the new issue market for similar securities, the secondary trading markets and dealer quotes. Option adjusted spread models are utilized to evaluate securities such as asset backed securities that have early redemption features. These securities are classified as Level 2. NAV funds' underlying investments in this category are valued using the same inputs.

(b) High yield bonds represent investments in below investment grade fixed income securities as well as commingled high yield bond funds. The valuation inputs for the securities primarily utilize observable market information and are based on a spread to U.S. Treasury securities and consider yields available on comparable securities of issuers with similar credit ratings. These securities are primarily classified as Level 2. Securities whose valuation inputs are not based on observable market information are classified as Level 3. NAV funds' underlying investments in this category are valued using the same inputs.

(c) Emerging market bonds represent investments in securities issued by governments and other entities located in emerging countries as well as registered mutual funds and commingled emerging market bond funds. The valuation inputs for the securities utilize observable market information and are primarily based on dealer quotes or a spread relative to the local government bonds. The registered mutual fund is classified as Level 1 while individual securities are primarily classified as Level 2.

(d) U.S. stocks represent investments in stocks of U.S. based companies as well as commingled U.S. stock funds. The valuation inputs for U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. Securities that are not actively traded but can be directly or indirectly observable are classified as Level 2. Securities whose valuation inputs are not based on observable market information are classified as Level 3. NAV funds' underlying investments in this category are valued using the same inputs.

(e) Non-U.S. stocks represent investments in stocks of companies based in developed countries outside the U.S. as well as commingled funds. The valuation inputs for these non-U.S. stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. NAV funds' underlying investments in this category are valued using the same inputs.

(g) Private equity represents non-public investments in domestic and foreign buy out and venture capital funds. Private equity funds are primarily structured as limited partnerships and are valued according to the valuation policy of each partnership, subject to prevailing accounting and other regulatory guidelines. The partnerships are valued at NAV using valuation methodologies that consider a range of factors, including but not limited to the price at which investments were acquired, the nature of the investments, market conditions, trading values on comparable public securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investments. These valuation methodologies involve a significant degree of judgment.

(h) Private debt represents non-public investments in distressed or mezzanine debt funds and pension group insurance contracts. Pension group insurance contracts are valued based on actuarial assumptions and are classified as Level 3. Mezzanine debt instruments are debt instruments that are subordinated to other debt issues and may include embedded equity instruments such as warrants. Private debt funds are primarily structured as limited partnerships and are valued at NAV according to the valuation policy of each partnership, subject to prevailing accounting and other regulatory guidelines. The valuation of underlying fund investments is based on factors including the issuer's current and projected credit worthiness, the securities' terms, reference to the securities of comparable companies, and other market factors. These valuation methodologies involve a significant degree of judgment.

(i) Market neutral hedge funds hold investments in a diversified mix of instruments that are intended in combination to exhibit low correlations to market fluctuations. These investments are typically combined with futures to achieve uncorrelated excess returns over various markets. Hedge funds are valued at NAV based on the market value of the underlying investments which include publicly traded equity and fixed income securities and privately negotiated debt securities.

(j) Directional hedge funds—This asset category represents investments that may exhibit somewhat higher correlations to market fluctuations than the market neutral hedge funds. Investments in hedge funds include both direct investments and investments in diversified funds of funds. Hedge funds are valued at NAV based on the market value of the underlying investments which include publicly traded equity and fixed income securities and privately negotiated debt securities.

(k) Real estate represents investments in commingled funds and limited partnerships that invest in a diversified portfolio of real estate properties. These investments are valued at NAV according to the valuation policy of each fund or partnership, subject to prevailing accounting and other regulatory guidelines. The valuation inputs of the underlying properties are generally based on third-party appraisals that use comparable sales or a projection of future cash flows to determine fair value. These valuation methodologies involve a significant degree of judgment.

(l) Multi-asset strategies represent broadly diversified strategies that have the flexibility to tactically adjust exposures to different asset classes through time. This asset category includes investments in registered mutual funds which are classified as Level 1 and may include commingled funds which are valued at NAV based on the market value of the underlying investments.

(m) Derivatives include exchange traded futures contracts which are classified as Level 1, as well as privately negotiated over the counter contracts that are classified as Level 2. The market values represent gains or losses that occur due to differences between stated contract terms and fluctuations in underlying market instruments.

(o) Cash equivalents and short-term investments represent investments that are used in conjunction with derivatives positions or are used to provide liquidity for the payment of benefits or other purposes. The valuation inputs of securities are based on a spread to U.S. Treasury Bills, the Federal Funds Rate, or London Interbank Offered Rate and consider yields available on comparable securities of issuers with similar credit ratings and are primarily classified as Level 2. The commingled funds are valued at NAV based on the market value of the underlying investments using the same valuation inputs described above.

Derivative instruments: Derivative instruments are used to reduce risk as well as provide return. The gross notional exposure of the derivative instruments directly held by the Combined Pension Plan is shown below. The notional amount of the derivatives corresponds to market exposure but does not represent an actual cash investment. Our post-retirement plans were not invested in derivative instruments for the years ended December 31, 2020 or 2019.


	Gross Notional Exposure
	Combined Pension Plan Years Ended December 31,
	2020		2019
	(Dollars in millions)
Derivative instruments:
Exchange-traded U.S. equity futures	$	84	184
Exchange-traded Treasury and other interest rate futures	1,033		1,253
Exchange-traded Foreign currency futures	12		—
Exchange-traded EURO futures	6		10
Interest rate swaps	124		44
Credit default swaps	43		205
Index swaps	1,297		2,058
Foreign exchange forwards	769		508
Options	222		146

Concentrations of Risk: Investments, in general, are exposed to various risks, such as significant world events, interest rate, credit, foreign currency and overall market volatility risk. These risks are managed by broadly diversifying assets across numerous asset classes and strategies with differing expected returns, volatilities and correlations. Risk is also broadly diversified across numerous market sectors and individual companies. Financial instruments that potentially subject the plans to concentrations of counterparty risk consist principally of investment contracts with high quality financial institutions. These investment contracts are typically collateralized obligations and/or are actively managed, limiting the amount of counterparty exposure to any one financial institution. Although the investments are well diversified, the value of plan assets could change materially depending upon the overall market volatility, which could affect the funded status of the plan.


	Combined Pension Plan Assets Valued Using Level 3 Inputs
	High Yield Bonds		U.S. Stocks	Private Debt	Total
	(Dollars in millions)
Balance at December 31, 2018	$	7	2	15	24
Acquisitions (dispositions)	(2)		—	1	(1)
Actual return on plan assets	—		(1)	—	(1)
Balance at December 31, 2019	5		1	16	22
Acquisitions (dispositions)	1		—	(17)	(16)
Actual return on plan assets	—		1	1	2
Balance at December 31, 2020	$	6	2	—	8

Certain gains and losses are allocated between assets sold during the year and assets still held at year-end based on transactions and changes in valuations that occurred during the year. These allocations also impact our calculation of net acquisitions and dispositions.

For the year ended December 31, 2020, the investment program produced actual gains on Combined Pension Plan assets of $1.2 billion as compared to expected returns of $593 million for a difference of $618 million. For the year ended December 31, 2019, the investment program produced actual gains on Combined Pension Plan assets of $1.6 billion as compared to the expected returns of $618 million for a difference of $1.0 billion. The short-term annual returns on plan assets will almost always be different from the expected long-term returns and the plans could experience net gains or losses, due primarily to the volatility occurring in the financial markets during any given year.


	Combined Pension Plan			Post-Retirement Benefit Plans
	Years Ended December 31,			Years Ended December 31,
	2020		2019	2020	2019
	(Dollars in millions)
Benefit obligation	$	(12,202)	(12,217)	(3,048)	(3,037)
Fair value of plan assets	10,546		10,493	5	13
Unfunded status	(1,656)		(1,724)	(3,043)	(3,024)
Current portion of unfunded status	—		—	(228)	(224)
Non-current portion of unfunded status	$	(1,656)	(1,724)	(2,815)	(2,800)

The following table presents cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2019, items recognized as a component of net periodic benefits expense in 2020, additional items deferred during 2020 and cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2020. The items not recognized as a component of net periodic benefits expense have been recorded on our consolidated balance sheets in accumulated other comprehensive loss:


	As of and for the Years Ended December 31,
	2019		Recognition of Net Periodic Benefits Expense	Deferrals	Net Change in AOCL	2020
	(Dollars in millions)
Accumulated other comprehensive loss:
Pension plans:
Net actuarial (loss) gain	$	(3,046)	203	(150)	53	(2,993)
Prior service benefit (cost)	47		(9)	3	(6)	41
Deferred income tax benefit (expense)	770		(47)	32	(15)	755
Total pension plans	(2,229)		147	(115)	32	(2,197)
Post-retirement benefit plans:
Net actuarial (loss) gain	(175)		—	(171)	(171)	(346)
Prior service (cost) benefit	(71)		16	35	51	(20)
Curtailment loss	—		4	—	4	4
Deferred income tax benefit (expense)	62		(5)	33	28	90
Total post-retirement benefit plans	(184)		15	(103)	(88)	(272)
Total accumulated other comprehensive loss	$	(2,413)	162	(218)	(56)	(2,469)

The following table presents cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2018, items recognized as a component of net periodic benefits expense in 2019, additional items deferred during 2019 and cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2018. The items not recognized as a component of net periodic benefits expense have been recorded on our consolidated balance sheets in accumulated other comprehensive loss:


	As of and for the Years Ended December 31,
	2018		Recognition of Net Periodic Benefits Expense	Deferrals	Net Change in AOCL	2019
	(Dollars in millions)
Accumulated other comprehensive loss:
Pension plans:
Net actuarial (loss) gain	$	(2,973)	224	(297)	(73)	(3,046)
Prior service benefit (cost)	46		(8)	9	1	47
Deferred income tax benefit (expense)	754		(53)	69	16	770
Total pension plans	(2,173)		163	(219)	(56)	(2,229)
Post-retirement benefit plans:
Net actuarial gain (loss)	7		—	(182)	(182)	(175)
Prior service (cost) benefit	(87)		16	—	16	(71)
Deferred income tax benefit (expense)	22		(4)	44	40	62
Total post-retirement benefit plans	(58)		12	(138)	(126)	(184)
Total accumulated other comprehensive (loss) income	$	(2,231)	175	(357)	(182)	(2,413)

We sponsor post-retirement health care plans with several benefit options that provide prescription drug benefits that we deem actuarially equivalent to or exceeding Medicare Part D. We recognize the impact of the federal subsidy received under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 in the calculation of our post-retirement benefit obligation and net periodic post-retirement benefit expense.

We provide health care and life insurance benefits to essentially all of our active employees. We are largely self-funded for the cost of the health care plan. Our health care benefit expense for current employees was $307 million, $381 million and $434 million for the years ended December 31, 2020, 2019 and 2018, respectively. Union-represented employee benefits are based on negotiated collective bargaining agreements. Employees contributed $133 million, $148 million, $142 million for the years ended December 31, 2020, 2019 and 2018, respectively. Our group basic life insurance plans are fully insured and the premiums are paid by us.

We sponsor a qualified defined contribution plan covering substantially all of our U.S. employees. Under this plan, employees may contribute a percentage of their annual compensation up to certain maximums, as defined by the plan and by the Internal Revenue Service ("IRS"). Currently, we match a percentage of employee contributions in cash. At December 31, 2020 and 2019, the assets of the plan included approximately 11 million shares of our common stock all of which were the result of the combination of previous employer match and participant directed contributions. We recognized expenses related to this plan of $101 million, $113 million and $93 million for the years ended December 31, 2020, 2019 and 2018, respectively.